Dangote Group has announced the achievement of first oil from its upstream petroleum assets, with plans to commence marketable crude production in the coming weeks, marking a major step towards fully integrated oil operations.
In an interview with S&P Global’s Platts, the company’s Vice-President, Devakumar Edwin, disclosed that early-stage testing has begun on crude extracted from its oil licences in the Niger Delta.
“We have opened a well and begun standard testing, which should be completed in the next three to four weeks maximum,” Edwin said. “After that point, oil can start to be pumped in larger volumes, and the company can begin work on drilling new wells.”
The development signals Dangote Group’s entry into upstream crude production, as it seeks to strengthen supply reliability for its refining operations.
Also speaking, Chief Executive Officer of the Dangote Refinery, David Bird, said the upstream expansion is expected to enhance crude availability and operational stability.
“Alongside its upstream interests, the company is seeking to establish its own shipping presence to help reduce logistics costs and improve the reliability of its crude sourcing,” Bird said. “Combined with WAEP’s indigenous production, Dangote-owned vessels could offer the refinery a fully integrated and attractive source of stable crude supply.”
Bird added that crude deliveries would be assessed on commercial terms, noting that internal transfers may still operate at arm’s length. “Dangote has interests in upstream, we will continue to grow that, but that doesn’t necessarily mean that it won’t be arms length at every phase,” he said.
Efforts to obtain comments from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Dangote Refinery were unsuccessful as of the time of filing this report.
The move into upstream production is expected to help address supply constraints that have occasionally affected refinery operations since its launch.
In April, Nigerian National Petroleum Company Limited announced plans to allocate seven crude cargoes to the Dangote Refinery in May, up from five in previous months, as part of efforts to stabilise feedstock supply.
